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Withdrew the funds from 529 plan in my name, FBO my child. Funds were not used for education, however. How do I report this, and pay the taxes due?

 
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2 Replies
ColeenD3
Expert Alumni

Withdrew the funds from 529 plan in my name, FBO my child. Funds were not used for education, however. How do I report this, and pay the taxes due?

Just enter the 1099-Q. Without any corresponding education expenses, it will automatically be taxable. Your tax will be included on your return. You may still get a refund. If you owe, you can pay the IRS as you normally would.

Hal_Al
Level 15

Withdrew the funds from 529 plan in my name, FBO my child. Funds were not used for education, however. How do I report this, and pay the taxes due?

For 529 plans, there is an “owner” (usually the parent), and a “beneficiary” (usually the student dependent). The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the Qualified Tuition Plan (QTP) to the school, the student is the "recipient". The distribution will be reported on IRS form 1099-Q. 

 

The 1099-Q gets reported on the recipient's return. The recipient's name & SS# will be on the 1099-Q.

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